Many people get themselves into trouble by not doing their due diligence before purchasing a home. Knowing what problems to look for can save you from years of headaches from owning a home you hate. You could end up spending 30 years paying for the house, so spending that time on due diligence is a must.
There are certain things you need to prepare before you can be confident that the purchase will be worthwhile. Here are five things you should check on before you buy a house.
Your Finances
You have to be sure that you will be able to afford the monthly payments for your mortgage and that your credit score is good. The state of your finances is the most important thing when buying a house. A lot of lenders will require a good credit score, and you’ll need to have alternatives in mind if your score isn’t that great.
You can use a calculator that tells you how much house you can afford so you don’t inadvertently doom yourself to foreclosure. However, the most important thing you’ll need to consider is how stable your career will be in the next few years. Once you’ve gotten your financial affairs in order, it is time for you to start scouting for that home.
The Neighborhood
Another thing you’ll need to check for when buying a home is what the neighborhood it is in is like. The neighborhood will influence your quality of life, and your neighbors can make your life miserable when living there. On top of that, the overall real estate trends in a neighborhood will determine the value of your home over the years.
You’ll also want to look at whether you will need to pay HOA fees to live in that home. These fees can add a lot to your expenses, but finances aren’t the only reason you’ll want to know if you’re buying in an HOA neighborhood. If you don’t want anyone telling you where you can put your trash can or whether or not you can have your garage door open, avoid HOAs.
Your physical environment is also critical to how much you need to pay for insurance. For example, being near water will cause you to be liable for flood insurance. Certain areas have their own environmental hazards, so you have to factor those into your decision-making.
The State of the House
The most obvious thing you’ll need to check when buying a house is the house itself. However, you’d be surprised how many people skip this step. It is highly recommended that you get the house inspected and appraised to make sure you’re not getting ripped off. You’ll also want to decide how much money you are willing to put into the house to make it into what you want.
All of these things must be considered before taking the plunge into homeownership. Many people overlook this step and end up with a home that they hate and can’t get rid of. Simple things like water damage and mold can be devastating on your health. You also want to check for damage to the foundation and the roof.
The Real Estate Trends
The best house isn’t always the best investment. The house of your dreams could be located in a neighborhood where prices are stagnant or dropping. Another potential issue is buying the most expensive house on the block. Even if it’s a good deal for the house, if the neighborhood real estate market can’t bear the cost your investment may not pay off.
When you’re trying to choose a new home, to make the most of your investment you may want to choose a home in an up-and-coming neighborhood, especially if it borders a desirable area. Find out where the investors are buying homes, and be ready to become an aggressive buyer if you want to beat them to the next deal.
Legal Issues That Come Up
There are many legalities involved when buying a house that people don’t understand. Getting a lawyer is critical in certain situations. When buying property you should be aware of the common litigation issues that people run into. For example, certain types of homes that have liens on them can be a huge nuisance for the buyer.
You’ll want to know the house’s legal situation before taking the plunge so you don’t end up in costly litigation that can stay in court for years. You’ll also want to stay away from homes that might require you to evict someone. That is a legal quagmire that can end up being a nightmare for the buyer.
Making Sure Everything Is Okay
Ultimately, the closing process can contain many pitfalls. It is best for you to have a good agent to guide you through the process. A great agent and an experienced lawyer is the best defense you will have against making a bad decision when you’re buying a house.
